Wombat Exchange

The highly anticipated Side Pool is coming to Wombat on the 21st of September 2022 at 2AM UTC! HAY from Helio Protocol will be the first token listing onboarding, with a $40M liquidity cap ($20M/asset). So, what’s this new pool all about, and why is Wombat bringing it on?<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/57278bad29da4e6682e7be3e06ca327b.png" />How is the Side Pool Different from the Main Pool?As users of Wombat already know, the Main Pool consists of well-established and time-tested stablecoins like USDC, USDT, DAI, and BUSD. We want to make more stablecoins available to you, but risk levels vary. Newer innovative stablecoins are rather volatile as compared to those already in the Main Pool. Considering Wombat’s sustainability and integrity as an exchange you trust, we prioritize managing risks; thus, a separate pool is carved out to house riskier tokens. In this way, any wild swings would not affect the Main Pool, isolating risk and facilitating balance.Since the Side Pool is an entirely separate pool, a routing token is needed, and, in this case, it will be BUSD. A routing asset allows for inter-pool swapping. Meaning, users can swap assets from the Main Pool to the Side Pool and vice versa. In our illustration below, we simplified the concept for better understanding:<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/91f6972713a7451d93f5b2d2992d390a.jpeg" />For example, you want to swap HAY to USDT; normally this cannot be done since they live in different pools. By having the routing asset (BUSD) in both pools, it works like a bridge. Your HAY will be swapped to BUSD, then BUSD to USDT.Users won’t have to be hassled with two steps. Just swap as usual, and Wombat will do the routing for you on the back end. It’s important to remember that inter-pool swapping fees are higher (i.e., gas, slippage, price impact) because two swaps happen in one go. Swap fee for the side pool will be 0.04%.As for the pool design, Wombat kept the single-sided liquidity provision unchanged, just like the Main Pool. Unlike other exchanges, you’ll only need one type of token to be a Liquidity Provider. veWOM boosting also works like in the Main Pool, and so is each asset’s Coverage Ratio.<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/39e0d112c08041a8a30d824ec83d4251.jpeg" />How Does the Side Pool Ensure Safety?The most significant innovation in this pool design is its ability to protect itself from being filled by one token — which creates an imbalance. In cases like tokens being depegged or hacked, other exchanges, as we’ve seen months prior, were drained and left in such an unhealthy state. We aim to limit the damage and protect our liquidity providers holding other tokens.A stricter requirement will be placed on these volatile assets’ coverage ratios and supply limits for the best protection. When the coverage ratio of the from-token (of the volatile asset) exceeds 1.5, a coverage ratio fee will be charged on top of the haircut to discourage users from swapping. When the coverage ratio reaches the maximum limit we’ve set, which is 1.8, a 100% fee is charged, meaning no further swap is possible. A detailed fee breakdown will be updated.This pool’s smart contract is well-engineered and passed <a href="https://github.com/peckshield/publications/blob/master/audit_reports/PeckShield-Audit-Report-WombatV2-v1.0.pdf" rel="noopener noreferrer nofollow">Peckshield’s auditing</a>. All known vulnerabilities are fixed and deployed to ensure comprehensive security.Side Pool Emission AllocationThe estimated emission for the side pool will be as follows:<img src="https://miro.medium.com/max/700/1*2pcAEonc2bYvNW53gpEQLw.png" />*Updated as of 20th SepFinal ThoughtsWombat’s implementation of the Side pool allows us to list trending coins so users can have a broader range of choices. Since these stablecoins are more decentralized with distinct pegging mechanisms, they are categorized as higher risk. Throwing risky tokens into the same pool as where the well-established ones live can harm the exchange and its users. We bring you more stablecoins variety and all this while minimizing risks for you.For more detailed information on the mechanism, check out our V2 whitepaper: <a href="https://www.wombat.exchange/Wombat_Whitepaper_SidePool.pdf" rel="noopener noreferrer nofollow">https://www.wombat.exchange/Wombat_Whitepaper_SidePool.pdf</a>What to Watch Out ForBringing in HAY is just the first step to bringing you these innovative stablecoins. Expect more to be listed in very near future!About Wombat ExchangeWombat Exchange is a multichain stableswap native on the BNB Chain, focused on re-engineering the stableswap experience with its innovative algorithm design as the next-generation stableswap 2.0.Wombat’s vision is to fuel DeFi growth and push boundaries with greater capital efficiency, increased accessibility, and scalability, with the adoption in a multichain world. To learn more, visit wombat.exchange, or follow us on the social channels below:<a href="https://wombat.exchange/" rel="noopener noreferrer nofollow">Website</a> |<a href="https://t.me/WombatExchange" rel="noopener noreferrer nofollow"> Telegram</a> |<a href="https://twitter.com/WombatExchange" rel="noopener noreferrer nofollow"> Twitter</a> |<a href="https://discord.gg/wombat" rel="noopener noreferrer nofollow"> Discord</a>

Side Pool Launch Announcement

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